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AIPROPX ReportForbes · 57m ago
America Can't Get Enough Matcha. Japan Is Struggling To Keep Up
Dining America Can't Get Enough Matcha. Japan Is Struggling To Keep Up By Akiko Katayama ,
Forbes contributors publish independent expert analyses and insights. Akiko Katayama covers Japanese food and culture. Follow Author Aug 31, 2026, 08:00am EDT --:-- / --:-- This voice experience is generated by AI. Learn more . This voice experience is generated by AI. Learn more . Summary America's Matcha boom is driving up the price of Japan's tea leaves and exposing bottlenecks in a centuries-old industry. One Shizuoka producer is betting that solar-powered farming could offer a way forward.
America can't get enough Matcha. But the boom is creating an unexpected problem in Japan: the country may not have enough tea, farmers, or processing capacity to keep up with global demand.
Matcha lattes have become a major gateway for American consumers. Japan's tea exports reached a record ¥72.1 billion ($6.25 million) in 2025, up 98% from the previous year and roughly triple their level a decade ago. The U.S. accounted for 35% of Japan's total tea exports and Matcha made up about 85% of those exports.
The surge is a windfall for Matcha producers. But for Japan's tea industry as a whole, it is creating a supply-chain squeeze.
Overseas buyers are bidding aggressively for high-quality Tencha, the tea leaves used to make Matcha. According to the Japan Food Journal and NHK, the price of Tencha rose for the fifth consecutive year, jumping from ¥5,678 per kilogram in 2024 to ¥14,681 in 2025, nearly a threefold increase in a single year.
At the same time, high-quality Matcha is increasingly being directed toward lucrative export markets, contributing to tighter domestic supplies. More farmers are also converting fields from Sencha, Japan's traditional loose-leaf green tea, to Tencha production because of the higher returns. That shift could put upward pressure on prices of other types of Japanese tea as well.
The problem is that Japan cannot simply plant more tea overnight.
For generations, Sencha has been at the center of Japan's tea industry. Producing Tencha, however, requires different cultivation and processing methods. Farmers need materials to shade the tea plants from sunlight, as well as specialized drying equipment and other machinery that can require investments of tens of millions of yen. For smaller producers that lack the capital to make such investments, the industry's shift toward Matcha can become an additional pressure to exit the business.
Even producing Tencha does not solve the entire problem. The leaves must still be ground into the fine powder known as Matcha, a process that typically requires specialized milling facilities. High-speed grinding using cooled metal mills is common, but such facilities remain limited in number across Japan and are expensive to build.
As a result, demand for the country's limited milling capacity has surged, creating waiting lists for processing slots.
There is another structural problem. Japan's tea-growing area cannot be expanded quickly. When existing farmland is converted to Tencha production, less land remains available for Sencha and other varieties. If the shift continues, today's Matcha boom could eventually contribute to higher prices and tighter supplies across Japan's broader green-tea market.
One tea producer in Shizuoka Prefecture is taking a different approach. Rather than simply expanding production, Hattori Tea Farm is trying to make its farming operation more productive, energy-independent and resilient to climate change.
The company is led by Yoshiaki Hattori, the fourth generation of a family that has been in the tea business for roughly 120 years. Working in the family business, Hattori became increasingly aware of the complexity of Japan's tea distribution system and questioned why consumers often had little connection to the people who actually grew their tea. He wanted to simplify the supply chain and deliver better, safer tea directly to consumers.
Today, Hattori Tea Farm handles the production, processing and sale of organic, pesticide-free Matcha and other types of tea from its own operation and exports tea products to roughly 50 countries.
"We have been increasing production by about 150% year over year in recent years, but we still cannot keep up with demand," Hattori says.
Hattori began looking overseas long before Matcha became a global trend. As a student, he traveled abroad as a backpacker and later began visiting European markets to sell Japanese tea.
He soon encountered a problem. Sencha required consumers to understand how to use a teapot and how to brew the tea properly. Matcha was different: It was powdered, easy to transport and could be incorporated into familiar drinks.
But Hattori knew little about making Matcha himself. He spent roughly six years traveling to Nishio in Aichi Prefecture and Uji in Kyoto, two of Japan's best-known tea-producing regions, learning the craft from scratch. About 15 years ago, he began seriously targeting overseas markets with Matcha.
At the heart of Hattori's model is an unusual idea: use solar power not just to generate electricity, but as part of the farm's production infrastructure.
Since 2014, the company has installed solar panels above its tea fields through agrivoltaics, also known in Japan as solar sharing. The electricity generated is used to power its tea-processing factory, offices and other operations, such as company electric vehicles. The factory is now 100% off-grid, according to the company.
Hattori also generates revenue by selling electricity through Japan's feed-in tariff program and to contracted corporate customers. Reducing its dependence on electricity purchased from utilities has cut the company's electricity costs to roughly one-third of their previous level, according to Hattori.
But the solar panels serve another important purpose.
Tencha is normally shaded for about a month before harvest. The reduction in sunlight increases amino acids in...
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